Rat hepatocytes were incubated in monolayer culture for 8 h. Glucagon (10nM) increased the total phosphatidate phosphohydrolase activity by 1.7-fold. This effect was abolished by adding cycloheximide, actinomycin D or 500 pM-insulin to the incubations. The glucagon-induced increase was synergistic with that produced by an optimum concentration of 100 nM-dexamethasone. Theophylline (1mM) potentiated the effect of glucagon, but it did not affect the dexamethasone-induced increase in the phosphohydrolase activity. The relative proportion of the phosphohydrolase activity associated with membranes was decreased by glucagon when 0.15 mM-oleate was added 15 min before the end of the incubations to translocate the phosphohydrolase from the cytosol. This glucagon effect was not seen at 0.5 mM-oleate. Since glucagon also increased the total phosphohydrolase activity, the membrane-associated activity was maintained at 0.15 mM-oleate and was increased at 0.5 mM-oleate. This activity at both oleate concentrations was also increased in incubations that contained dexamethasone, particularly in the presence of glucagon. Insulin increased the relative proportion of phosphatidate phosphohydrolase that was associated with membranes at 0.15 mM-oleate, but not at 0.5 mM-oleate. It also decreased the absolute phosphohydrolase activity on the membranes at both oleate concentrations in incubations that also contained glucagon and dexamethasone. None of the hormonal combinations significantly altered the total glycerol phosphate acyltransferase activity. However, glucagon significantly increased the microsomal activities, and insulin had the opposite effect. Glucagon also decreased the mitochondrial acyltransferase activity. There was a highly significant correlation between the total phosphatidate phosphohydrolase activity and the synthesis of neutral lipids from glycerol phosphate and 0.5 mM-oleate in homogenates of cells from all of the hormonal combinations. Phosphatidate phosphohydrolase activity is increased in the long term by glucocorticoids and also by glucagon through cyclic AMP. In the short term, glucagon increases the concentration of fatty acid required to translocate the cytosolic reservoir of activity to the membranes on which phosphatidate is synthesized. Insulin opposes the combined actions of glucagon and glucocorticoids. The long-term events explain the large increases in the phosphohydrolase activity that occur in vivo in a variety of stress conditions. The expression of this activity depends on increases in the net availability of fatty acids and their CoA esters in the liver.